Plans for US and Asian version of green tech sales benchmark.
The Living Planet Fund (LPF), a subsidiary of the WWF, the conservation NGO, has partnered with CA Cheuvreux, the broker research arm of French bank, Crédit Agricole, to launch its first environmental index, the Living Planet Green Tech Index, a benchmark of 55 European listed companies with more than 20% of their sales in green technology. Amundi Asset Management, the fusion of France’s Crédit Agricole Asset Management and Société Générale Asset Management, one of the world’s largest asset managers with €687.7bn in assets under management, has signed an exclusive licence to launch an exchange traded fund (ETF) based on the index. The partnership also aims to launch separate US and Asian indices based on the European model.
WWF is a rarity in the NGO world by having an investment arm subsidiary, Living Planet Fund Management Company, which was launched in 2003. It is run by Chiew Chong, former director of finance and administration at WWF International and supports and helps contribute towards WWF initiatives. The new index will follow an LPF/WWF exclusion list that screens out companies that have more than 10% of their business in arms production, fossil fuel production, gambling, genetic engineering, nuclear power, tobacco, and alcohol. Living Planet has also set up an advisory board that aims to deal with any ethical concerns that arise over green technology issues.
The index, which was researched and created by CA Cheuvreux, covers seven green tech themes: renewable energy, water management, alternative energy and transport, eco products and services, waste management, energy efficiency, and biomass services. Standard & Poor’s will carry out the index calculation. Cheuvreux says it is basing the 20% green tech sales hurdle for the index on a questionnaire sent in the summer of 2010 to about 200 European companies, of which 23% responded. It uses in-house research to adjust or calculate the level of sales that it considers to qualify for the index. Constituent companies must have a free-float market cap of over €40m and an average minimum daily average trading volume of €2m over two consecutive quarters. Companies must also have three-year forward revenues in the green tech themes superior to 40% if the market cap is below €1bn, or 25% for larger companies. The index will also issue information to investors on the environmental and social impact of the companies in the index, although this will not be part of the index weighting. The Living Planet Fund already sells under its own label an environmental equity fund and energy fund managed by Sarasin, and a bond fund managed by Macif Gestion. Its total assets are just below €30m. It aims to shortly launch a global environmental equity fund and is planning a private equity fund and a water fund under the Living Planet banner.